Data Security

The Data Security Survey was conducted in September 2011 and drew input from 73 participants across a wide range of industries and regions.

IACCM conducted this study to investigate how companies are addressing data/privacy breaches. The study identified how frequently organizations review data privacy and security processes and procedures, who conducts the reviews, the kind of tools and training that are used, and how these processes impact customer relationships.

Hi Jessica
This is a common problem. Many of the relationships with indirect
suppliers are less formal and may have been in place for years, leading to resistance over use of standard templates.

It is of course important to establish whether the issue is just general resistance or whether the standards are not really appropriate to the range of indirect relationships required, or lack required flexibility.

We do have benchmark data at IACCM on cycle times and will be issuing reports on the latest information at the end of April. It should be possible to provide interim data if you need it sooner.

Yes I agree, please share with me, I would like to see the legislation and I have recently observed the change in contractor's attitude in negotiation from UK.

• Ministry of Justice
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2015-03-11 06:27:23

The most recent change is the implementation of the European Directives into UK Law, through the issue of the 2015 Public Contracts Regulations. This dictates Government procurement rather than standard commercial arrangements. Section 83 indicates a minimum contract record retention of the contract duration where they are over a certain value: As most contracts have an extended liability life of at least 6 years and as we have a wider obligation to maintain public records, then policy in my government Department is to err on the side of caution and retain for 6-7 years. The legislation is found HERE www.legislation.gov.uk/uksi/2015/102/pdfs/uksi_20150102_en.pdf

Darryl, this is one of the topics that is driving increased discussion about levels of transparency in contract relationships. In many areas of critical supply, there is mutual interest in maintaining financial viability, which may include increased use of techniques such as open book accounting. But to lead to true collaboration, that must be a mutual endeavor, where both parties are working to identify ways to reduce costs and / or improve value. If it is only about apportioning what is already in place, it is unlikely to yield a positive result.

Loving the sentiment in this suggestion This issues goes wider into diversity of thinking. A procurement team asking questions about diversity of thought and attitude as well as gender and race are more likely to find the supplier with the innovative mindset so many seek but do not always find.

• Raytheon Company
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2015-02-17 09:57:56

Ugh. No. Political Correctness has no place in the economic analysis of suppliers. The only real consideration is the price,delivery, and statutory requirements of the products or services you are procuring. All other considerations should be secondary to maximizing economic utility of suppliers. Unless there is compelling evidence that "diversity" provides an economic advantage to a company.

• Chevron
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2015-02-18 20:07:38

Absolutely positively NOT! As noted below, Political Correctness (which is an endemic disease in and of itself against which I've been campaigning for the last 30 years) has no place in an economic evaluation of potential supplier.
My employer values diversity highly and I have been living and working overseas since 1997 in 7 different countries on 4 different continents. I'm also an American married to an Australian and multi-linguistic. So I am obviously neither unfamiliar nor uncomfortable with cultural diversity. But it has no place in an economic evaluation.
RE: The original article in State of Flux: I would also add that I do not agree with a purchasing company even attempting to influence (much less coerce) the makeup of their suppliers board of directors (which seems like a conflict of interest to me). I am even more strongly opposed to governments (from any country) attempting to mandate percentages for board makeup or company ownership.
This article is specifically about women on the board, but in other countries this can and has been carried over to mandated percentages for ethnic group, religious group, or tribal groups...think about that for a few minutes before voicing support for something like this. This is almost universally a recipe for inefficiency, wasted time and money, and large amounts of unnecessary hassle for all involved.
It's best to keep your evaluations of your suppliers based on their ability to provide materials and services and perform to your employer's requirements and satisfaction.

Categorization, or segmentation, has been quite pervasive for over 25 years - so there should be plenty of practical experiences to share!

Perhaps the most common tool used in this area is the Kraljic Matrix, which is a 2x2 matrix yielding four segments, often labelled as Strategic, Leveraged, Bottleneck and Tactical. With each of these segments, there are sub-strategies. Tendering, contracting, negotiation and post-award management will vary between the four segments.

From a practical perspective, the most helpful insight that I can offer is that one needs to continually remind oneself that the segmentation is driven by the commodity and not the supplier. A supplier is "strategic" because of the commodity or service they provide, and not necessarily because of the supplier themselves. Most suppliers want to be considered "strategic" and so in advising a supplier that they are not strategic, it should be underscored that the reason for the non-strategic classification is due to how the customer organization views the commodity/service and not the supplier.

If you want to discuss further, please do not hesitate in letting me know,

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2015-01-27 00:12:06

Thanks Jim for the prompt reply.

I am very interested in how 'post-award management will vary between the four segments.'

Any mechanism with regards to timely assessment on vendor's performance is available?

• IACCM
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2015-01-27 03:51:42

In the post-award phase, KPI's (Key Performance Indicators) are a vital tool. In each quadrant, KPI's will be utilized. However, the focus of the KPI's will differ.

In a Tactical relationship, on time delivery and price will be a focus.

In a Leveraged relationship, price will be a focus but TCO will generally take root in a nascent manner.

In a Bottleneck relationship, KPI's will focus on availability of supply and quality.

In a Strategic relationship, the KPI's will foster elements beyond those of time, money and quality and focus on broader relationship dimensions.

This is not to suggest that these quadrants are the exclusive domain of these KPI's. But these are the KPI's that are of greatest relevance.

• Hewlett-Packard Company
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2015-01-28 18:15:03

You might think about this problem - a lot of the lower value commercial activities seem not to take less time than the higher value activities. If you could find an efficient way to get insight to the low-value activities, but get meaningful data, you would be in a position to identify ways to streamline these activities. There are major dividends to be gained from a time-cost perspective.

I've seen different systems. In general, I view a methodology that aims to reproduce the details of the contract into another form such as a report or Excel worksheet as a paper exercise. Essentially, a company wanting to do that might be better off looking at some sort of project management tool.

Think about the way a typical person views a contract: It's complicated, confusing, and reading it in detail is a task avoided at all costs. There is even a trend toward thinking, "Well, it's not like we follow the contract anyway." In that light, I believe that a system designed to break out the actual deliverables and the owner of each, and then the restrictions or prescriptions for each deliverable that differ from the company standard, would make more sense. Presumably your personnel know the standard way of operating for your company.

Another issue is identifying the audience. Most issues have an owner and a separate driver. If one were to invite only Senior Directors and up to a meeting, the folks in charge of delivering on a day to day basis might not get critical information. A contract handover is supposed to be about transitioning from negotiation to operationalization. Keep that in mind when selecting the participants.

• Centrica
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2014-12-16 04:28:50

I agree with the post below. Teh most important thing is to get the audience right, and understand the obligations. Where I work, for substantial contracts we prepare an obligations tracker to show Deliverable obligations with dates, behavioural obligations and event driven obligations. Combining that with a high level deal sheet including term date, general overview of services and costs should be a reasonable starting place for anyone that needs to use the contract.

• Bala Gopal P.G.
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2015-01-06 03:59:38

The transfer process may be initiated with a Post award Contract kick off meeting and subsequenly a Contract management plan, Project management plan/ procedure, Responsibility matrix for supply, deivearbles etc, MTOs, Quantity take off etc to ensure consistenacy as per CONTRACTUAL obligation/ clauses etc.

That is true, last time when prices went below $65 I lost my job. I do not want to happen that again.

• Husky Energy Inc.
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2014-11-11 10:01:05

In doing a strategic SWOT analysis of the current situation of the O&G industry, one needs to look at each geo-political areas.

• Orange
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2014-11-13 07:03:30

From an IACCM point of view, it would be interesting to know which price clauses O&G contracts typically contain.
- Is pricing linked to market prices, or are they fixed over contract term, or a mix of both?
- Are all physical delivery contracts based on market, and then it is up to the parties to manage price risk via financial tools such as options and forwards?
- Are there triggers that would allow a provider to suspend or terminate delivery should the price fall below a threshold?

Would be interesting to hear from IACCM members active in the O&G sector.

• Dept of Veterans Affairs
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2014-11-18 09:09:10

While EU consumption may be flat, oil use in China has exponentially increased by a wide margin in the last decade, and shows no signs of slowing down. The current shale/fracking expansion in the US is definitely altering the previous O&G landscape, as is the expansion of IS in the oil-rich region of Iraq and Syria. OPEC's continuing production at current levels (despite the temporary drop in prices) is mystifying only if no increased military action between IS and the US is expected. If conflict increases in that region and the oil fields of Iraq remain largely untapped due to embargo or conflict, or if IS continues its expansionist actions, OPEC's production at current levels will amount to shoring up their member economies at huge losses. Still, this is near-prescient market prediction on a large scale and could not be adequately discussed or resolved in this forum.

Mr. Tardecilla correctly notes the geopolitical calculations required to provide a decent SWOT; one factor missing from current replies is Europe's complete dependence on Russian natural gas (40% and rising). Without Russian gas (as was demonstrated a few years ago), the EU is in a bind, which may partly explain their lack of response to Russia's actions in Ukraine. While jobs may fluctuate, there ar a number of geographic regions with high employment potential for those with O&G experience. With the specialization of O&G contract language, this field is full of risk, but with risk comes opportunity.

• BP
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2014-12-29 22:12:13

With regard to models used in oil and gas contracts

Oil and gas operators do use index linked pricing for commodities in service contracts for example supply of chemicals under a service contract or for drilling commodities/

For labour contracts it is common for many companies to use "should cost" models for the supply of labour to give transparency of those costs. In these models the cost is broken down into its constitute components such as actual salaries payrolls and taxes , overhead and profit. Using this transparency supply chain and the line can work with its suppliers to manage the cost cycles in our industry . For example in the current deflationary market where real cost of salaries and agency rates is reducing then charge out rates can be reduced. Also both sides can look to see where there is opportunity to reduce cost without affecting service. For example is the overhead high because there is particular requirement that the customer requests in its contract which is higher than the industry norm. In these times there is more appetite for both sides to have those direct conversations.

Even if these models are not in current contracts they can be introduced as part of negotiation during contract extensions or as part of a cost reduction initiative. Transparent and respectful negotiations are key to the success of any such programmes